Can Red Hat do for OpenStack what it did for Linux?

Red Hat made its first $1 billion commercializing Linux. Now, it hopes to make even more doing the same for OpenStack.

Red Hat executives say OpenStack the open source cloud computing platform is just like Linux. The code just needs to be massaged into a commercially-hardened package before enterprises will really use it. But just because Red Hat successfully commercialized Linux does not guarantee its OpenStack effort will go as well.

At the company's annual Summit in Boston this month, Red Hat made what Red Hat executive vice president of products and technology Paul Cormier said was the biggest announcement in the nine years that the company has been running the show. Integrating OpenStack into its Red Hat Enterprise Linux (RHEL) operating system, the company hopes, will propel it through the next decade of growth.

Red Hat is delivering OpenStack in two flavors. One is through the Red Hat Enterprise Linux (RHEL) OpenStack Platform, aimed at service providers and large enterprises. It's an OpenStack distribution that leaves room for businesses to layer revenue-generating services on top. The second is Red Hat Cloud Infrastructure (CI), which is a complete package for deploying a private cloud Infrastructure-as-a-Service based on OpenStack. It includes Red Hat Virtualization technology based on the Kernel Virtual Machine (KVM) along with baked-in management features such as self-service portals, chargeback metering, and orchestration tools. It also allows for connections with public clouds from Amazon Web Services, with more to be added. Red Hat has not released pricing details yet for either product, but they are expected to hit the market in July.

After joining the open source OpenStack community in April 2012, the company has quickly become a major player in it, with Red Hat workers now contributing more code than thoe from any other company, according to an analysis by Bitergia. Red Hat's commitment to OpenStack also comes from the highest levels of the company, with its top executives pitching the services this week.

Krishnan Subramanian, an analyst at Rishidot research who tracks OpenStack, says Red Hat has a legitimate chance to become a major distributor given its successful track record in basically doing the same thing with Linux. Red Hat's distro will be a layered addition on top of RHEL, giving any organization with RHEL an easy opportunity to try out OpenStack.

Red Hat will not be alone in distributing OpenStack though; there are already numerous providers with their own OpenStack products. Competing Linux companies SUSE and Ubuntu have OpenStack distributions, for example. Dell and HP have their own OpenStack private cloud options as well. Meanwhile, companies like Piston Cloud Computing, CloudScaling, MetaCloud and Nebula are pure-play OpenStack distributions. Rackspace has an integrated OpenStack-powered public cloud and private cloud offering.

Subramanian says this crowded market could actually be good for Red Hat. The company already has a formidable standing in enterprises with its RHEL OS, and now customers will have the ability to get an open source cloud from the same provider. This "one throat to choke" mentality could make for easier onboarding of OpenStack within the enterprise. As the top contributor of code to the project, Red Hat could have an advantage in supporting OpenStack for customers, Subramanian says.

Not everyone's drinking the Red Hat Kool-Aid though. "Delivering and deploying OpenStack is an integration challenge that extends well beyond the OS," says Forrester analyst James Staten. Deploying private clouds is not as easy as just throwing some code on top of RHEL. There are issues related to storage, networking and perhaps most importantly, cultural changes within an organization to support a private cloud.

Red Hat has an answer for the technical implementation: Also announced this week was a partnership with Mirantis, one of the leading OpenStack consultancies. Mirantis has a series of OpenStack tools in a package named Fuel for deploying OpenStack clouds.

The bigger question may just be how big the private cloud market will get, and how many of those clouds will be OpenStack based. Organizations are increasingly outsourcing their IT functions to service providers and using the public cloud, as evidenced by AWS's massive growth. But, at the same time they also want to retain control of their operations, which could open opportunities for private clouds. Staten says VMware, Citrix and others have had trouble gaining footing for private clouds deployments.

For Red Hat executives say they are not discouraged. "We did this already, it's the exact same playbook as what we did with Linux," Cormier says.

Network World senior writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

Copyright 2018 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of IDG Communications is prohibited.